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A not-so-utopic NFC world in a not-so-far future

NFC World Congress took place on September 17-19 at the French Riviera. I was not able to attend but my below article was published in the official publication of the event. I tried to materialize the use cases of NFC beyond payment in a near future.

Here is my article:

NFC : Beyond payment


Over the last few years, we’ve seen NFC being discussed in all major platforms within the payments, mobile and transportation industry, even sometimes in mainstream media. Each player in the NFC ecosystem has its own version of the NFC story based on the perspective of its core business and market. I am a member of the bank frontier, but in this article, I will try to reflect my personal NFC perspective which is beyond payment.

First, a brief outline of the latest status on the NFC world. Payment system schemes like Visa and MasterCard have already ported their contactless payment applications into the UICC platforms. Banks are trying to drive the mobile payment infrastructure based on these secure payment applications. MNOs have fought hard to win the battle to host the secure element on their UICC, yet this battle seems to be won. However, almost all the latest NFC handsets,which are still not many, now come with both embedded and UICC secure element type designs. The transportation industry played with NFC for a long time, some implementations appeared but no success story has been written yet. In the GSM world, major MNOs now has their own mobile wallets running on different mobile platforms using the cards installed on UICC running mobile payment application instances of Visa and MasterCard. These cards are personalized by banks over the air via TSMs through various working conditions. Google, and recently Microsoft announced their own mobile wallets with a similar approach and similar intentions with MNOs. Google also recently announced its first tablet Nexus 7 with NFC support. With all the patents on NFC, Apple is still being expected to join the game but the latest iPhone 4/S did not had the NFC chip.

With all these in mind, the NFC ecosystem is yet, still in its toddler years. All those major companies have put their efforts into a new game but one component that matters most has still not joined the arena; the user!

NFC was initially designed as internet of things; a device level communication standard that will enable consumer electronic devices like refrigerator, mobile phone, TV, camera,  locks -you name it, to transmit data over the existing contactless standards. This is supposed to enable easy and convenient use cases, bringing on a new era in where devices act differently than what they were originally designed for.

From the banking perspective, one of the main barriers preventing NFC from reaching critical mass is exactly this, the nonexistence of use cases for NFC other than payment. Otherwise for mobile payments, as TechCrunch correctly pointed out recently, we are getting into a position to solve a problem which does not yet exist.

So as of today, what should be the next step for NFC world to reach critical mass? The answer is simple; definitely more and more use cases for NFC. Banks or MNOs will not be the the main drivers here, but the rest of the ecosystem, especially consumer electronics segment will be in charge of this task. Of course the mobile phone – the single most important device in the consumer’s daily life – still remains the core of the  NFC ecosystem but the transacting devices against the handset are even more important than the phone. It is still a chicken and egg problem since there are no enough NFC handsets, but let’s hope that all those shining predictions become reality and growth rate in devices and transactions become real in the near future.

In the rest of my article, I am going to exaggerate the use cases of NFC in daily life assuming that most of the devices have NFC chips. I, as an average person will have all the required devices, hardware, software, services and apps ready to use NFC. I will dream that all the components have been implemented and are being used by ordinary people -like me.

A not-so-utopic NFC world in a not-so-far future

When I return home, I run the Key application on my phone. I enter the PIN and the application tells me to wave my phone to lock of the door which has an integrated contactless reader instead of a key lock. My door authenticates my identity over RSA signature which was generated randomly based on date and time. It takes less than 300 milliseconds after I wave my phone to open the door.

I get in the house. My notification bar in my phone tells me that I need to go shopping. My food stock is running low. I go to the fridge and wave my phone against the touch screen user interface of the fridge. My fridge is a smart one, each time I put or get something, I wave the product to the contactless reader inside the fridge, which manages my food stock. I define the thresholds of my own taste, for example; I always must have at least 5 bottles of beer, 3 ice creams, 10 bottles of diet coke, etc. I tap the touchscreen interface of my fridge and it tells me to wave my phone to download the shopping list to my phone. I wave it and it transmits the shopping list to my shopping list app on my phone.

I get to my car, again I open my Key application and enter my PIN on the car tab. Same thing with the house lock happens and I am now in my car. I place my phone in its holder and it asks me if I would like to go to supermarket -since a new shopping list have been downloaded. When I confirm this, it automatically transmits the route to my favorite supermarket to the GPS navigation on my car. (My favorite supermarket option on my phone was set by the loyalty app of the supermarket!) I begin driving in an old fashioned way; by myself!

When I park my car in the parking lot, I wave my phone to the parking spot’s sign and download the exact location of my car to my phone. Then I walk to the entrance and take a shopping cart. I start the touch interface on the cart and tap my phone for downloading the shopping list to the cart. My supermarket’s loyalty card details are also retrieved by the cart’s interface and I get some personalized recommendations on the screen. Then I start browsing the aisles. Each time I place a product in the cart, I wave it to reader of the cart and it updates my shopping list. I can also view the status of my list from the screen. When I am done, I go to the check-out. The touch screen interface tells me the amount I must pay for the items in my shopping list. I open my mobile wallet on my phone, enter my card PIN and wave it to the screen. My bank authorizes my transaction. Of course the loyalty program of the super market also downloaded my bonus points that I earned during this shopping trip to the loyalty app on my phone.

I walk  to my car, and if I cannot remember where I parked my car, I just wave my phone to a sign and it shows me the way to my car on my phone.

On the way home, I stop by at the mall to visit my favorite coffee shop for a latte. I get inside the store and touch my phone to the check in tag near the door. I see that a friend on my list was here 10 minutes ago and he must be still in the mall. Maybe I call him, let’s see. I open the coffee shop app and order my latte inside my app. I wave my phone to the ordering terminal and the cashier confirms my order. She asks me if I want use my bonus points for payment, which she can view from the terminal that was sent from my app when I waved my phone. I skip it and pay with my credit card through my wallet on the phone. At the same time, I receive a text message from the coffee shop that I earned a free movie with my purchase which is available now on my set top box. I tap my phone to the terminal and download my ticket to my phone.

I return back home and put everything in the fridge. It automatically updates my food stock in my fridge. I am done with shopping until next time I get a notification on my phone.

I sit back and open my smart TV. I bump into a commercial of the supermarket which tells me that I can get %20 percent off next week on select products if I spend a certain amount of money this week -which luckily I just did!  It tells me to touch my phone to the set top box through which I am receiving the broadcast over satellite. It checks my transaction amount and downloads the %20 off to my loyalty card app on my phone. It will be available next time I go shopping. Good. I will buy the expensive Belgian beer with the %20 off I have.

Then I remember that I am entitled for a new movie that I earned from the coffee shop loyalty card. I wave my phone to the set top box and I see the message on the TV that I can view it whenever I want to.

I am now in the mood for the movie and I choose to watch it immediately. While watching it, I see a lovely watch in the movie which will be a perfect gift for my wedding anniversary. I pause the movie, open the merchandising menu. I find the watch among many other items appeared in the movie and place an order. I choose the remote payment option and type my phone number from the remote. I immediately receive a notification on my phone that the broadcasting company is requesting me to enter my PIN for the transaction. I tap on it and my mobile wallet runs for me to choose my credit card and key in the PIN. I see on the transaction screen that I have the option to pay it in 3 installments, I go for it. I receive confirmation on my TV and my phone that the payment was successfully processed and I will receive the watch in two days. Great!

Final words

How does this 2 hours of my imaginary future life sound to you? Science fiction or likely to happen? I am up for the second!

NFC promises huge opportunities for a more connected world. We already have the connectivity on 3G/4G mobile networks; NFC provides a new layer that brings the convenience over interactivity and transactions for physical coexistence between people and devices. Devices are limited only to sky when it comes to work with NFC.

I am hoping for an NFC world driven by the ecosystem as a whole which includes many players yet do not exist in the game yet.

Mobile phone reading data from a watch!

Due to an NFC project I am currently involved in, I have an iCarte dongle from WDI. Luckily, I also happen to have a Mifare watch from LAKS from a previous project.

I was browsing the AppStore and found this great app, iCarte Reader by which you can read and write mifare chips over an iPhone with an iCarte dongle. Since I already have a cool mifare gadget, my LAKS watch, I began to impress my friends by using my iPhone to read and write data to my watch!

This is a true contactless show case for me; my phone and watch exchanging data over the contactless interface. How cool is that!

Embedded contactless reader for PCs from Sony and HID

Sony announced a very good news today for the contactless world. Sony and HID Global forms an alliance to create an embedded contactless reader for PCs. Sony, being one of the pioneers in the contactless technology, will be incorporating with HID, which acquired Omnikey -one of the best PC connected reader manufacturers, for building an embedded contactless reader.

Sony is already an influencer of contactless technology; they own their own contactless chip –Felica– and they are playing a huge role on the NFC area. Needless to say, Sony has huge opportunities on their home entertainment products from Play Station 3 to wide screen TVs and Vaio laptop line up for integrating with NFC based chips.

On the other hand, HID has a wide range of products in identity and security markets. I personally admire the PC connected Omnikey readers a lot, very robust and has a great support in terms of drivers and software.

I believe a contactless reader may eventually become a standard peripheral device for PCs, if this attempt is successfully completed. I can imagine how wide range of applications can be developed once the computers have embedded contactless readers. People can top up or check their balances/transaction history of transportation cards at home, (which is already being done in far east right now) process credit card transactions for shopping online or buy airtime for their NFC handsets. I had personally seen an embedded Felica reader in action on a Sony guy I had a meeting with, so this is not a long run. It just needs the right actors to be involved in the picture.

All contactless readers support both ISO 1443 type A and B, so these readers will support all current contactless chips that are available like Mifare, Calypso, Legic, etc. Of course that will bring a lot of political discussion over software and ownership of the reader IC, but for now let’s cross fingers for Sony and HID!

Fast track at the airport : TAV Passport Card

Passing through airport gates and check in procedures always require a very long time to be spent in the airports. Thanks to contactless devices, that may be history.

Contactless ecosystem and airport check in services has much to offer together. TAV Passport card is no exception in that sense. TAV is the operator of biggest 3 airports in Turkey -and a few more in neighboring countries. They are doing excellent job in running these airports, yet they developed a contactless card for frequent flyers.

TAV Card is a contactless card -mifare 1k- offering:

  • a special gate for fast entrance to airport
  • business check in -regardless from your ticket type
  • free parking at the airport parking area for 30 days/year
  • airport transfers
  • fast passport control at a special gate for TAV card holders
  • discount rates at duty free
  • discount rates at the coffee shops at the airport

It’s a very well designed product for frequent flyers which need speed and convenience on the time they spend at the airport. Contactless devices provide these requirements, so it’s the correct choice to use a contactless card.

Castle POS terminals were used and credits go to Verisoft for developing the whole system.

Guitar with a contactless reader

One thing I really love -other than contactless systems, of course- is the music. Although not being able to play as much as I did in the past, I’ve been playing guitar for years. When I bumped into the article of Mobile Money Exchange, I was really excited: The guitar of the street band has a contactless reader attached to the headstock and it accepts contactless cards. What an innovative idea!

When you see a street band in a metro or on the street, the main motivation of giving a few bucks is to support the musicians. But these guys have even better idea, they are supporting some charity and a contactless readers ensures this, simply because there’s no cash included! When you wave your Barclays contactless card against the headstock of the guitar, you simply donate a fixed amount of money to a charity. (Help a London Child, in this case for 5 pounds)

I love the idea and I am now hoping this idea to be implemented by transport operators, banks, loyalty system providers who are actively using contactless cards.

Contactless reader device for home use?

According to the post at NFC News, ASK released a contactless reader device for home use. Reader is connected via USB port and is compatible with all popular contactless card types.

Contactless readers attached to PC over USB port has been available in the market for a long time. Aiming the end users who has a contactless card for transportation, it’s a very nice feature for both the user and the operator to top up the card at home. The user is free to top up any time and the operator gets rid of distribution channels cost for top up. Everyone is happy.

On the other side there are very obstacles for this dream to come true: It’s quite hard to distribute the readers and the software to the end users. Who will be in charge of the cost of the reader and the software? How secure is to give the card holder the ability to trace the transaction at his/her own PC? For the power users things may be easy but for the average people it will be hard to install the driver of the reader, software and the connect to a financial service for top up.

We will see how successful will the reader become…